Portfolio Update

RNS Number : 2652U

River & Mercantile UK Micro Cap Inv

16 January 2017

 

Press Release                                                                                                   16 January 2017

River and Mercantile UK Micro Cap Investment Company Limited - Portfolio update

River and Mercantile UK Micro Cap Investment Company Limited confirms NAV has reached £100m for the first time since launch and highlights redemption mechanism.

River and Mercantile UK Micro Cap Investment Company Limited ("RMMC" or the "Company") was formed following the placing of shares on the Main Market of the London Stock Exchange plc in November 2014. The portfolio is managed by Philip Rodrigs with the support of the broader equity investment team at River and Mercantile Asset Management and has delivered strong investment returns, growing the net asset value ("NAV") by 42.1% since launch (to 31 December 2016). The Board notes that the NAV of the Company has now exceeded £100m for the first time since launch and reminds investors of the redemption mechanism designed to maintain the NAV at around this level.

The Board is committed to achieving long term capital growth and, where possible, returning such growth to Shareholders throughout the life of the Company. At the time of the original placing, the Portfolio Manager advised the Board that, under normal circumstance, it believed a NAV in the region of £100 million would best position the Company to take advantage of a portfolio of micro cap companies. Accordingly, the Directors stated that they would intend to operate a redemption mechanism, from time to time, pursuant to which shares may be redeemed compulsorily so as to return the NAV back to around £100 million.

In the Board's opinion, the Portfolio Manager is best placed to determine when such a redemption should be implemented and the requirements for Portfolio realisations to fund any such redemption, taking into account both the Company's cash position and the desire to minimise any adverse impact on Shareholders from the realisation process. Redemptions will, subject to compliance with all applicable law and regulation and the original prospectus, take place on a pro rata basis but all redemptions will normally be subject to a de-minimis value to be returned of approximately £10 million (before costs).

When the Board decides to operate the Redemption Mechanism, the Directors will promptly announce their intentions and such an announcement will include the full details.

Andrew Chapman, chairman of RMMC commented:

"At the time of the placing, we stated that in the event the NAV were to grow in excess of £100m, the Directors intended to operate a redemption mechanism under which a portion of share capital may be redeemed compulsorily so as to return the NAV back to around £100 million. This allows the Company to exploit fully the underlying investment opportunity and to deliver high and sustainable returns to shareholders, principally in the form of capital gains. This will enable portfolio holdings to have a meaningful impact on the Company's performance, which might otherwise be marginal within the context of a larger fund; and ensure that the Company can continually take advantage of the illiquidity risk premium inherent in micro cap companies."

ENDS

Notes for Editors:

River and Mercantile Asset Management LLP (RAMAM) is a UK based, long-only investment management firm, established in 2006, specialising in managing UK and Global equity portfolios for Institutional and other professional investors and now manages assets in excess of £2.7bn as of 30 September 2016.

River and Mercantile Group PLC (R&M Group) is an advisory and investment solutions group with a broad range of services, from consulting and advisory to fully-delegated fiduciary and fund management. R&M Group is focused on creating investment solutions for its clients across its core markets: UK defined benefit pension schemes, UK defined contribution pension schemes, US pensions, insurance, retail and strategic relationships.

R&M Group was formed by the merger of P-Solve Limited (P-Solve) and River and Mercantile Asset Management LLP (RAMAM) which was approved by the UK Financial Conduct Authority in March 2014 and listed on the London Stock Exchange in June 2014.

Press Enquiries Contact:

River and Mercantile Group           James Barham [e-mail] 0207601 6262 07785 718 121 Mark Thomas [e-mail] 0207 601 6262 0785 037 4884

Winterflood Securities Limited 020 3100 0000 Joe Winkley Neil Morgan

 

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